Billion Dollar Corporate Tax Cut Shows Government Priorities

The $1 billion tax cut for corporations announced yesterday by the Alberta government exposes the government's real priority is giving money back to corporate friends and not investing in essential programs for Alberta families, says the Alberta Federation of Labour today. The AFL also criticizes the cut as shortsighted and not viable over the long term.

"Although some businesses and business organizations have been clamoring for this kind of tax break for years, I believe that they are being very short-sighted," said Cormack. "The corporate sector benefits as much or more than the rest of us from public education, Medicare and all the other public programs and services that create our social and economic infrastructure. Their failure to provide their fair share of tax support will mean either tax increases for the rest of us or a further decline in public services."

"$1 billion would go a long way to ensure we finally fix the persistent problems plaguing our health and education systems due to years of cutbacks," adds Cormack. "It would be money better used put into services for families."

Cormack also expresses concern that the growing list of tax cuts being tossed around by the Conservatives is not sustainable over the long term. Tax cuts announced in 2000 amount to almost $2.5 billion. "What will happen when the boom goes bust?" asks Cormack.

Cormack suspects that when the price of oil drops, as it will eventually do, the Tories' corporate friends won't be interested in tax increases. "That will mean more cuts to people services down the road."

Cormack states that large corporations, that are making record profits, should be required to pay more than 8% tax. "Hard working average families will be required to pay 10.5%. Why should some huge corporation making millions in profits only pay 8%? It is unfair."

Cormack urges the government to scrap plans for corporate tax breaks and instead wisely invest the money in health, education and other people services. "Responding to the needs of Albertans is what they are elected to do."

"This government is going the wrong way in taxation," concluded Cormack. "At their own growth summit, restoring public services was the clear priority - not tax cuts. Now they are cutting corporate taxes and the public education component of property taxes, while doing an inadequate job of funding public programs."